Endeavour Group (EDV) Q1 2025 TU earnings summary

Executive summary

• Group sales reached AUD 3.105 billion for the quarter, up 0.5% year-over-year, with Retail flat at AUD 2.538 billion and Hotels up 2.5% to AUD 567 million, reflecting stable trading amid cost-of-living pressures.

• Diversified portfolio offset retail moderation with stronger hotel performance, highlighting the advantage of combined on-premise and off-premise offerings.

• Retail maintained market share in a challenging environment, with My Dan's loyalty base reaching 5.5 million active members.

• Cost of living pressures impacted consumer spending, but the diversified portfolio provided resilience.

Financial highlights

• Online retail sales rose 6.3% to AUD 235 million, representing 9.3% of total retail sales, driven by double-digit growth in BWS and higher Dan Murphy's online sales.

• Retail EBIT margin guidance for H1 is 7–7.5% (excluding One Endeavour costs), down from 8% in the prior year, due to increased promotions, consumer down-trading, and cost inflation.

• Pinnacle Drinks exclusive brands delivered another quarter of sales growth, with 120 new products released.

• One Endeavour operating expenses expected at AUD 60–80 million for FY25, split 70% retail/30% hotels, evenly across halves.

Outlook and guidance

• Achieving retail sales growth in Q2 is expected to be challenging, with continued elevated promotional activity and value-seeking consumer behavior.

• Hotels maintain positive momentum, with Christmas bookings already at 54% capacity and positive sales continuing in October.

• Cost inflation remains a headwind; cost management and efficiency programs continue, including Endeavour Go, which delivered AUD 100 million in savings in FY24.

• Retail EBIT margin guidance incorporates current trading trends and assumes persistent challenging conditions through the holiday period.

• Capital expenditure for FY25 remains guided at AUD 450–500 million; finance costs expected at AUD 310–325 million.